Demcrats Economic Plan Revealed

From the Opinion Journal:

Mr. Rubin's "fiscal problems" riff is really a rhetorical sleight-of-hand, using future entitlement problems to justify a tax increase today. He knows all too well that not a dime of new revenue raised today would be "saved" or otherwise devoted to paying for future Social Security or Medicare benefits. They would be spent on other things by the current Congress, just as today's surplus payroll tax revenues are spent, and just as they were spent when Mr. Rubin was at Treasury in the 1990s.

If Mr. Rubin wants to help reduce the future entitlement benefits he frets so much about, he could always support reforming those programs. Yet when President Bush invited him to participate in a bipartisan entitlement commission last year, Mr. Rubin refused.

Which is why we suspect that Mr. Rubin's real game here is politics. The Citigroup Inc. executive is part of Hillary Rodham Clinton's braintrust, and he and she would like nothing better than to coax Mr. Bush into raising taxes in the next two years. That would take the tax issue off the table in 2008, while splintering Republicans the way President George H.W. Bush's tax-hike deal with George Mitchell did going into 1992.

And if a tax increase did contribute to a severe slowdown or recession, Republicans as the incumbent party in the White House would get the political blame. Recall how Bill Clinton pinned the recession of 1990-1991 on Mr. Bush and Reaganomics, even though the Gipper had left office long before and the economy was growing at a 4% annual rate by late 1992. Readers may recall who won that election.

By the way, how does Mr. Rubin continue to dodge any historical accountability for the dot-com bust of 2000 and the recession that followed? In the liberal economic narrative, we are supposed to believe that the Clinton Administration somehow ended in 1999, and that Mr. Bush is to blame for everything that followed. Yet the Nasdaq peak came in the spring of 2000 and the third quarter of that year recorded negative growth. The shallow recession began in March 2001, with slower-than-average growth continuing until the tax cuts on dividends and the top marginal income rate passed in 2003 and the expansion moved into high gear.